Question

SINGLE LUMP-SUM Below are four independent scenarios relating to the investment of a single lump-sum amount....

SINGLE LUMP-SUM Below are four independent scenarios relating to the investment of a single lump-sum amount. Calculate the future value of each, using the algebraic formula illustrated in the textbook. Then, verify your answer by reference to the “future value of $1” table. If you have a “business” calculator, additionally verify your calculations using the future value functions included with your calculator.

a) An investment of $2,000 for 6 years and then also for 8 years, at a 6% annual rate, compounded annually.

b) An investment of $1,000 for 6 months and then 1 year, at a 10% annual rate, compounded monthly.

c) An investment of $5,000 for 4 years, at a 5% annual rate, compounded semi-annually.

d) An investment of $15,000 for 4 years, at a 16% annual rate, compounded quarterly.

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